Coca-Cola Shakes Up Its Americas Business
- by Karlene Lukovitz @KLmarketdaily, December 13, 2013
The currently integrated North America business will now have a traditional company/bottler operating model, with two operating units: Coca-Cola North America and Coca-Cola Refreshments.
The company said the restructuring is designed to "streamline its focus and expedite its refranchising to independent bottling partners."
The North America business will now be headed by J. A. M. "Sandy" Douglas, as group president, reporting to chairman and CEO Muhtar Kent. Douglas will also continue his role as global chief customer officer. North America brands, foodservice, brand commercial, retail sales, R&D, venturing and emerging brands, strategy, franchise leadership and transformation and the Canadian franchise operations will report to Douglas.
Coca-Cola Refreshments (CCR), the bottling operations of North America, will be led by Paul Mulligan, as president of the division. CCR will become part of the Bottling Investments Group (BIG), and Mulligan will report to Irial Finan, president of BIG. Mulligan is currently head of commercial for BIG, and region director responsible for Japan and Latin America BIG operations. CCR Canada, product supply chain and service, bottler commercial, customer care and region sales will report to Mulligan.
The Coca-Cola Americas operating structure will cease to exist. The Latin America Group, led by Group president Brian Smith, will become part of Coca-Cola International. Smith will report to Ahmet Bozer, president of Coca-Cola International.
Coca-Cola streamlined its management a year ago, putting Cahillane in charge of the Americas, and Bozer in charge of the rest of the world. Cahillane had been viewed as a potential successor to Kent as CEO, noted The Wall Street Journal. Bozer--whose expanded responsibilities now include Latin America, is now clearly positioned as Kent's number two.
WSJ also reported that sources "close" to Coca-Cola said that Cahillane had Fallen out of favor in recent months because results were weaker than expected. Operating income in North America fell 8% in the first nine months of 2013 from a year earlier, amid flat volume and revenue, and growth also slowed in Latin America. Coca-Cola's share price has risen 8.2% this year, while the S&P 500 as a whole has seen 24% growth.
Consumers have been turning away from diet sodas of late, exacerbating the multi-year, industrywide downturn in regular soda sales. Soda accounts for 60% of Coca-Cola's U.S. sales.
PepsiCo has seen even sharper beverages sales declines in the U.S., notes WSJ.
